[Jamie M]

How can the board ensure effective financial oversight during an M&A process?

[Peter J. Gondek]

One crucial way the board can help ensure financial oversight during M&A is by actively challenging deal assumptions and expected synergies.

Questions the board should be asking are:

– Are management’s revenue and cost assumptions realistic?
– Are the synergies reflected in the projections reasonable?
– Is the integration plan likely to deliver the synergies over the long term?

The Board must ensure the management team is stress-testing their assumptions and projections. This includes running different scenarios through their financial models.

[Author]

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